Hormel is suing Johnsonvlle, alleging a former employee supplied trade-secret recipes and market intelligence. Last year, Americans spent $8.5 billion on sausages and hot dogs.
Call it a brat battle or a sausage subterfuge. Whatever the label, there’s a standoff brewing in the sausage world.
Hormel is suing its archrival Johnsonville, alleging a former employee left with trade-secret recipes and market intelligence and brought them to the competitor.
“The sausage market is increasingly competitive, and improper use of confidential, proprietary and trade-secret information, or wrongful competition or solicitation, could cause a manufacturer significant competitive economic disadvantage,” the suit reads.
Hormel also accuses another former employee of trying to lure other Hormel employees to Johnsonville after he changed jobs, violating a non-solicitation agreement.
Hormel, which alleges Johnsonville did not cooperate when sent a letter outlining the “unlawful behavior” of the two former employees, is asking for the return and deletion of confidential data as well as unspecified monetary damages.
Hormel, in a statement, said it “does not typically comment on pending litigation, but we do believe that our complaint speaks for itself.” Johnsonville did not immediately reply to a request for comment about the suit.
Sausage is a big business in the U.S. Last August, the Dallas Federal Reserve’s Texas Manufacturing Outlook Survey noted there had been modest growth in the dinner sausage category, which is usually a sign of a weakening economy. Last year, Americans spent $8.5 billion on sausages (and hot dogs, which are a form of sausage) in U.S. supermarkets, according to the National Hot Dog and Sausage Council.
(Another fun fact: Los Angeles consumes more hot dogs than any other city, purchasing more than 27 million pounds of them in 2024.)
Millions of Gen Z are unemployed—and thanks to AI-induced cuts to corporate entry-level roles, landing that first job is about to get tougher. Look no further than the viral donut hack that helped one jobless 25-year-old stand out in Silicon Valley.
We’ve heard from a Gen Zer who waitressed at a major tech conference just to get her CV into the hands of hiring managers and a graduate who cold emailed her dream employers with the subject line, “proposal to hustle”.
Now, another unusual way to grab hiring managers attention is going viral: Sneaking your resume into a box of donuts.
Back in 2016, when Lukas Yla uprooted to San Francisco from Lithuania to chase his big tech dreams, he quickly realized landing a job in Silicon Valley was easier said than done.
Lightning struck while taking a bite into a freshly baked artisanal doughnut. Who could resist opening a box of the tasty treats?
So just like that, the millennial marketing specialist with five years experience under his belt, got to work making a Deliveroo-style uniform, a list of his dream employers and a secret memo for inside the donut boxes. Yla then spent more than a week hand-delivering the donuts to every company on his wish list in the disguise.
“I ended up delivering 50 boxes, addressed to the heads of marketing,” he told the BBC at the time. “Often, the receptionist would immediately pass the doughnuts straight to the recipient. Sometimes, they were called to reception: I could hand over the doughnuts and explain why I was really there.”
When they’d eventually open the box, they’d be greeted with the message: “Most resumes end up in trash. Mine—in your belly,” alongside his resume and a link to his LinkedIn profile. To increase his chances of success, he even leaked the extreme measures he was taking to the press.
The marketing hopeful scored at least 10 interviews. However, he tells Fortune that he failed to secure a work visa and so continued growing his career in Europe and has since worked as a director at Uber’s rival, Bolt.
Years later, Yla’s stunt is going viral all over again. A sign of just how bleak the job market has become, social media users are reviving his resume-in-a-donut-box hack as inspiration for desperate job seekers.
“Brilliant marketing, and a reminder that sometimes breaking the rules (with style) is exactly what it takes,” one Facebook post, which has racked up around 90,000 likes, writes.
Bagging an entry-level role has never been harder—so Gen Z needs to get creative
Millennials are the most educated generation in history, with Gen Z closely following behind. Yet their financial prospects and chances of getting hired are significantly dimmer than those of Gen X graduates.
And athough the landscape of internships has changed, with some offering six-figure salaries—a far cry from the unpaid coffee fetching days millennials (myself included) will remember. Actually landing a foot in the door after school or college is looking increasingly impossible.
Just 10 years ago, 94% of students had either landed work or gone into further education in the one year after graduating, according to data from the U.K. Department for Education. In 2024, just 59% of grads had full-time jobs 15 months after graduating. Many are turning to unemployment benefits to survive.
Likewise, over 4 million American Gen Zers are currently jobless. In China, the government has said that as of February, 1 in 6 young people are unemployed.
It’s no wonder over half (57%) of the class of 2025 reports feeling pessimistic about starting their careers, according to a survey for 1,925 members of the cohort from job platform Handshake. That’s an increase from 49% the prior year.
Gen Z job seekers are getting creative—and it’s working
The Gen Zers who are winning the war for work are thinking outside the box with hacks like Yla’s to gain a competitive edge.
After six months of failed efforts to land a gig, one young job-seeker named Basant Shenouda told Fortune she tracked what conferences recruiters were going to, and volunteered at them to have a chance to hand out her résumés. She ended up landing an internship at LinkedIn.
Another Gen Z candidate, Ayala Ossowski, wore her university’s baseball cap at her pizza joint job, and pitched her experience when customers asked about it. She wound up securing a gig at Cisco.
“The market is so saturated with such incredible talent that it takes some creativity in order to stand out from the crowd,” Ossowski told Fortune.
– Founding story. Forty percent of female founders say that macroeconomic conditions have hurt their businesses—and 46% say that political uncertainty in the U.S. is a direct threat, too. But amid the challenges of tariffs, weakened consumer confidence, and political attacks on diversity and inclusion, female founders see opportunity in other areas—namely, AI.
The early-stage VC firm Graham & Walker gathered these results from a survey of 180 female founders of “VC scalable” startups in North America.
Fifty-six percent of all-female founding teams see “more opportunities” because of AI, compared to only 46% of mixed-gender founding teams who say the same. This report speculates that female founders—who also cite fundraising as, still, a major challenge—could be looking at AI as a way to scale with less capital and avoid some of those fundraising challenges. Seventy-one percent of founders surveyed said raising their last round was harder than they thought it would be. Forty percent of founders still say their gender was a top factor in that difficulty. In 2024, according to Pitchbook, teams including female founders raised 27% more capital than the year prior, with $38 billion closed—but across 13.1% fewer deals than 2023.
Other fundraising challenges include “shifting goalposts”—with norms changing for early-stage funding and early-stage investors expecting founders to meet benchmarks that might have previously been reserved for Series A.
Fourteen founders in the survey specifically called out their experiences with female investors. Many of the concerns they raised are likely related to the pressure those female investors are under. One founder surveyed said female investors are “harder to win over” and “require every box to be checked,” while another said that they’ve pitched women who have “no real ability to do deals.”
The Most Powerful Women Daily newsletter is Fortune’s daily briefing for and about the women leading the business world. Today’s edition was curated by Nina Ajemian. Subscribe here.
Job candidates are getting lost in a flood of applications as AI supercharges hiring, so hiring platform Greenhouse is trying out a new tool for job seekers that borrows from an unlikely source: dating apps.
Dating platforms like Tinder, Bumble, and Hinge offer users a limited number of “super likes,” “super swipes,” or “roses” they can give to potential love interests. These are automatically bumped to the top of the recipient’s feed, making it more likely they’ll see the sender’s profile.
Greenhouse’s feature works in a similar way—users can designate one application per month to a company as their “dream job,” which Greenhouse says makes their application more visible to the hiring company’s recruiting team. The feature also allows candidates to fill out their profile in a more complete way than users who don’t use the feature.
“It’s really an attempt by us to get job seekers themselves to be part of the solution by getting people to put more energy, more intention into their search,” Jon Stross, president and cofounder of Greenhouse, tells Fortune. “In exchange, employers are able to focus on the candidates who want their positions the most.”
More than 1,200 companies on Greenhouse’s platform have signed up to use the feature so far, including Everlane, Flexport, and Guild. And around 7,000 candidates have taken advantage of it, the company says. People who have used the “Dream Job” feature get a new role within an average of 20.5 days, compared to the 35 to 50 day average of people who don’t, according to the company. The feature is free to use.
Only time will tell how Greenhouse’s “Dream Job” will pan out. But it’s a great example of how a very different recruiting landscape is forcing companies to rethink how they do business. And as the jobs market becomes more and more unmanageable, we’re likely to see other organizations look for new ways to sift through a deluge of résumés.
Happy Friday everyone, it’s finance editor Jeff Roberts pinch-hitting for Allie. Since I moved to Southern California two years ago, I’ve been struck by the region’s thriving venture capital scene—one that seems to fly under the media radar compared to Silicon Valley and New York. I recently spoke to a longtime veteran of the scene, Adam Winnick.
Winnick is a lively guy and has that all-important VC quality of being able to convene influential people. I first encountered him last month at a dinner for members of the Medici Network, a crypto-focused institutional investor conference, that brought together everyone from startup founders to bankers to representatives of Ivy League endowments and sovereign wealth funds.
The dinner took place at Avra in Beverly Hills. Having attended more than a few of these things, one thing I noticed—aside from the excellent Mediterranean food—was just how normal it felt. There was a time when everyone at a crypto event saw themselves as an outsider, and the VC industry viewed crypto venture capitalists as a different breed playing a different game.
I’m not sure that’s the case anymore. Crypto investing now feels like just another stream in venture capital, though some obvious differences remain—especially when it comes to getting paid. Unlike the traditional model where VCs obtain a bushel of shares from a startup, and then wait seven years, the crypto VC world is more liquid and revolves around tokens not stock. (If you want a closer look, check out this deep dive on the topic by Leo).
In the early days, the mix of crypto and venture capital resulted in some pretty egregious behavior—think VCs filling their bags with tokens tied to half-baked projects, and then dumping them onto retail investors. Lately, though, the adoption of stricter lock-up periods has curbed some of the worst abuses, and the expected arrival of clear regulations should improve things further.
For his part, Winnick is a big advocate for the token model. “It’s a powerful incentive mechanism to bootstrap network effects. Just because people misuse them today or didn’t know what to do with them early on doesn’t mean they’re not going to be used in the future,” he observes.
Tokens are likely to become a more common feature of the VC landscape if, as Winnick predicts, the worlds of traditional tech and crypto move closer together. If this convergence is indeed taking place, Winnick says the winners will be those who can figure out how to combine the mature tech stack and broad business networks of so-called Web2 with the highly technical and less capital intensive dynamics of Web3.
Winnick, a former banker, and his cofounder Kamel Mokeddem, a former Oracle exec, appear to be cracking the code on crypto investing. The IRR for the inaugural $45 million fund at their firm Finality Partners was 69% at the end of last year, and boasts Series A investments in promising crypto staking projects like Eigen Layer and Babylon. Meanwhile, though it’s early days, the fund’s second vehicle Liquid Fund is up 12% this year at a time when many other funds are posting flat or negative returns for the first part of 2025.
While Finality Partners is dwarfed by the giants of the crypto VC world like a16z and Haun Ventures, the traction its partners have gained suggest they’ve found a lane of their own—an achievement Winnick attributes to his willingness to give blunt advice and be directly accessible to the firm’s portfolio companies.
As always, Term Sheet is curious to hear your thoughts. Do you think the worlds of crypto and traditional VCs are coming closer together? And finally, in reading up for this column, I came across a New York business reporter who described the L.A. venture capital scene as more “passive aggressive.” Fair?
Good morning. Some modern CFOs now view marketing as a growth center rather than a cost center. Yet, despite this shift in mindset, marketing is still taking a back seat at many companies, squeezed by trade tensions, economic uncertainty, and cautious consumer spending.
New research from McKinsey highlights the evolving role of the chief marketing officer (CMO) and argues that better alignment between the CMO, CEO, and CFO is key to finding new growth opportunities. However, achieving this alignment is easier said than done. When accountability for the customer is unclear, and everyone in the C-suite is responsible for growth, often no one truly is.
McKinsey’s analysis of Fortune 500 executive teams, based on publicly available data, reveals a telling trend: companies with a single customer- or growth-focused executive, such as a CMO, grow up to 2.3 times faster than companies with multiple roles sharing those responsibilities.
But simply appointing a CMO isn’t enough. “Pull the CMO back to the center, have them align with the CFO, and get everyone moving in the same direction,” McKinsey recommends. Without clear ownership and support, even the most talented CMO can’t deliver their full potential.
Despite its strategic importance, marketing is often sidelined. According to Spencer Stuart, the percentage of Fortune 500 companies with a CMO dropped from 71% in 2023 to just 66% in 2024.
One challenge: CMOs often struggle to clearly communicate the value and costs of marketing to their finance counterparts. The most successful marketing organizations use sophisticated systems and agreed-upon KPIs to demonstrate the financial impact of their investments, McKinsey finds. This data-driven approach helps get CFOs onboard.
Retail is one sector where this alignment is increasingly evident. Ulta Beauty CFO Paula Oyibo, for example, recently told me that the company’s partnership with Beyoncé’s Cécred hair care line as a natural fit—highlighting how marketing and partnerships can drive growth.
Similarly, Mandy Fields, CFO of e.l.f. Beauty, believes in the power of collaboration between finance and marketing. “Oftentimes they’re at odds because finance looks at marketing as an expense,” she told me. “We have taken a different approach, seeing marketing as a sales driver, and that has proven to work for us.” For the full year 2024, e.l.f. Beauty delivered 28% sales growth and a 26% increase in adjusted EBITDA.
Kory Marchisotto, chief marketing officer at e.l.f. Beauty, recently told me that from the first day she and Fields met, “we just knew that, whatever was going to happen around us, there was this common respect and admiration for each other’s career.”
As McKinsey puts it, for growth strategies to succeed, C-suite leaders must truly view marketing as a strategic function.
Surprise commentary from a Chinese state-owned media outlet helped to send shares of Pop Mart, the toy store behind the buzzy Labubu dolls, down by 3.6% in Hong Kong trading Friday.
People’s Daily, a state media outlet, published an article on Friday criticizing the practice of selling “blind boxes,” a practice where chains sell mystery boxes that contain an unknown item from a larger collection. Blind boxes rely on the element of surprise and artificial scarcity, as shoppers buy boxes in the hope of getting a rare item. The practice is also well-suited to social media, as customers host unboxing videos for mass audiences.
While Pop Mart was not mentioned by name, the store chain relies on “blind boxes” for its toy sales. The toy chain’s shares are now down by just over 12% for the week.
In its article, People’s Daily warned that blind boxes could lead to youth addiction and called for stricter regulation of the practice. In 2023, China banned the sale of blind boxes to children under the age of 8.
In addition, Morgan Stanley on Wednesday noted that the bank had removed Pop Mart from its China and Hong Kong focus list, replacing it with insurance company PICC P&C, according to CNBC.
Pop Mart’s shares have risen by almost 500% over the past 12 months. Now valued at $40 billion, the toy store chain dwarfs Hello Kitty-owner Sanrio, worth about $12 billion. That optimism ties to both the success of its Labubu doll line, touted by celebrities like Dua Lipa, Rihanna, and Blackpink’s Lisa, as well as hopes that young Chinese will spend more on “emotional consumption,” spending big on hobbies even if they cut back on everyday items.
Wang Ning founded the first Pop Mart store in 2010, and the chain soon grew on the back of its own toys, like the Molly doll line. The company debuted on the Hong Kong stock exchange in late 2020.
Last year, Pop Mart reported 13 billion Chinese yuan ($1.2 billion) in revenue, a 107% increase. Profits increased by 204% to reach 3.3 billion yuan ($460 million).
Wang’s personal net worth has surged alongside Pop Mart’s shares. He’s now China’s 10th-richest person, according to Forbes estimates.
Small, fuzzy and baring sharp teeth, Chinese toymaker Pop Mart's Labubu monster dolls have taken over the world, drawing excited crowds at international stores and adorning the handbags of celebrities such as Rihanna and Cher.
Trump’s two-week delay on an Iran bombing decision has generated uncertainty that is holding investors (and businesses) back from making decisions. While the “fear index” dropped, U.S. markets still slid slightly in premarket trading.
Investors didn’t exactly breathe a sigh of relief after President Trump postponed a decision on bombing Iran for two weeks. U.S. stock futures dipped about 0.2% across the board after the Juneteenth holiday, reflecting unease not just over a potential war—but over indecision as well.
The issue? Investors didn’t read the two-week delay as an opening for diplomacy that would avoid the most catastrophic outcome: a bombed Iran blocking critical petroleum shipments through the Strait of Hormuz and sending oil to $130.
Instead, they viewed it as kicking the can down the road. The fear isn’t escalation per se—it’s prolonged uncertainty, with no concrete resolution in sight.
“That means two weeks of uncertainty for financial markets, but investors are still inclined to see the Middle East conflict as a local, not a global, economic issue,” UBS chief economist Paul Donovan said in a morning note seen by Fortune.
Indeed, while shares in U.S. markets traded sideways Friday morning (as they have year-to-date), shares in Europe and parts of Asia rose (as they have year-to-date). Hong Kong’s Hang Seng and India’s Nifty 50 both jumped 1.3% on the day, while in midday trading the STOXX Europe 600 and London’s FTSE rose 0.6%—and Germany’s DAX posted a 1% rise. For the year, the S&P 500 is up 1.7% while the STOXX Europe 600 is up 5.6%.
“The Middle East tensions represent another potential adverse shock to a fairly weak economy,” Nicola Nobile, Oxford Economics’ chief Italy economist, wrote in a Friday note about the Eurozone economy. “As we have shown, even the most severe scenario for oil prices would have a manageable impact on economic activity.”
The divergence in sentiment comes down to uncertainty.
Trump’s delay mirrors a broader pattern—on tariffs, TikTok (he signed another 90-day divestment extension Thursday), and now Iran. The so-called “TACO trade” (Trump Always Chickens Out) may be catchy, but for markets, it signals a lack of clarity that causes executives and investors to stall.
On Friday, the VIX—Wall Street’s fear gauge—fell 7.9% after Thursday’s spike on war talk. Still, it’s up 18% on the year.
Here’s a snapshot of the action across global markets this morning:
South Korea’s Kospi was up 1.5%.
India’s Nifty 50 was up 1.3%.
U.S. markets were closed yesterday for Juneteenth. S&P 500 futureswere down 0.2% in premarket trading today.
A miniature statue of U.S. President Donald Trump stands beside a model bunker-buster bomb, set against a backdrop featuring a map of the Middle East and Iran, displayed in Kananaskis, Alberta, Canada, on June 19, 2025.
Rising tensions between the U.S., Iran, and Israel have fueled speculation about possible U.S. military intervention, with Wall Street reporting a 65% chance of action against Iran by July, leading to increased oil price volatility and shipping costs, especially around the critical Strait of Hormuz. However, OPEC+’s substantial spare capacity is seen as a key buffer against major supply disruptions, while the surge in oil prices has also strengthened the U.S. dollar amid global uncertainty.
Questions are continuing to mount about how far tensions in the Middle East will spiral, with President Trump refusing to rule out U.S. intervention between Israel and Iran.
Overnight White House Press Secretary Karoline Leavitt suggested the Oval Office will take a view in the coming fortnight, relaying to reporters a direct message from the president: “Based on the fact that there’s a substantial chance of negotiations that may or may not take place with Iran in the near future, I will make my decision whether or not to go within the next two weeks.”
President Trump has kept spectators largely in the dark about his intentions, saying Wednesday “I may do it … I may not. I mean, nobody knows what I’m going to do.”
In a note Wednesday—published by Goldman ahead of Leavitt’s announcement yesterday—commodities researchers Daan Struyven, Ephraim Sutherland and Yulia Zhestkova Grigsby wrote there is a 65% of U.S. military action against Iran by July, citing a Polymarket survey.
That being said, the analysts left the chances of a U.S.-Iran deal this year at 50%.
As a result, the trio write “the term structure of implied volatility, and call skew suggest that oil markets believe that much higher prices are likely in the next few months, but see limited changes to the long term outlook.”
The note seen by Fortune adds: “Our global indices of oil shipping rates have increased over the past week as increased risks have lifted rates for Middle Eastern routes.”
Per Goldman’s research, the rate in U.S. dollars per barrel increased in the recent-term from $4.5 to $5.5 for clean stock and approximately $2.8 to $3.1 for dirty.
The projected volatility in Middle Eastern shipping costs comes down to the Strait of Hormuz, located on the southern border of Iran. The oil flow through the strait accounts for about 20% of global petroleum liquids consumption, writes the U.S. Energy Information Administration.
This, in turn, has ramifications for costs given the lag in delivery times and the use of less efficient routes.
Trump’s threatened intervention into Iran has gone as far as saying he knows where the nation’s supreme leader, Ayatollah Ali Khamenei, is hiding. Trump posted on Truth Social on Tuesday: “He is an easy target, but is safe there. We are not going to take him out (kill!), at least not for now.”
However the conflict plays out, strategists at Macquarie expect oil prices to continue to shift over the coming weeks, writing in a note earlier this week seen by Fortune: “We expect oil prices to remain volatile with an upward trend for the next few weeks as both Iran and Israel maintain their military intensity.
“Regardless of military or diplomatic progress, we expect Brent to rally towards the low $80 level before hitting a plateau as the perceived risk of actual oil supply disruption becomes largely discounted.”
OPEC buffer
Goldman also said OPEC+ could provide a much-needed buffer amid the volatility, undoing some of the cuts it has announced previously.
“While the exact magnitude is uncertain, we believe that above-average global spare capacity (worth around 4-5% of global demand) is the key buffer to Iran-only disruptions via larger-than-otherwise unwinds of OPEC+ production cuts,” added the Goldman analysts.
Already the volatility has lit a fire under the U.S. dollar, which has been caught in a tug-of-war between better-than-expected inflation expectations and a flee to safety amid rising geopolitical tensions.
As Antonio Ruggiero, senior FX and macro strategist at Convera wrote in a note to Fortune yesterday: “Behind the façade of safe-haven appeal lies the true driver of the dollar’s rebound: rising oil prices, now hovering near a five-month high.
“Since most global oil trades are settled in U.S. dollars, surging crude demand tends to drive additional demand for USD. This rebound in sentiment is also reflected in the options market, where—for the first time since April—traders have backed off from bearish dollar positions.”
Hugging Face’s co-founder, Thomas Wolf, is pouring cold water on the hopes that current AI systems could revolutionize scientific progress. Speaking to Fortune at VivaTech in Paris, Wolf argued that today’s large language models excel at producing plausible answers but lack the creativity to ask original scientific questions. Rather than building the next Einstein, Wolf says we may be creating a generation of digital “yes-men.”
Hugging Face’s top scientist, Thomas Wolf, says current AI systems are unlikely to make the scientific discoveries some leading labs are hoping for.
Speaking to Fortune at Viva Technology in Paris, the Hugging Face co-founder said that while large language models (LLMs) have shown an impressive ability to find answers to questions, they fall short when trying to ask the right ones—something Wolf sees as the more complex part of true scientific progress.
“In science, asking the question is the hard part, it’s not finding the answer,” Wolf said. “Once the question is asked, often the answer is quite obvious, but the tough part is really asking the question, and models are very bad at asking great questions.”
Wolf said he came to the conclusion after reading a widely circulated blog post by Anthropic CEO Dario Amodei called Machines of Loving Grace. In it, Amodei argues the world is about to see the 21st century “compressed” into a few years as AI accelerates science drastically.
Wolf said he initially found the piece inspiring but started to doubt Amodei’s idealistic vision of the future after the second read.
“It was saying AI is going to solve cancer and it’s going to solve mental health problems — it’s going to even bring peace into the world, but then I read it again and realized there’s something that sounds very wrong about it, and I don’t believe that,” he said.
For Wolf, the problem isn’t that AI lacks knowledge but that it lacks the ability to challenge our existing frame of knowledge. AI models are trained to predict likely continuations, for example, the next word in a sentence, and while today’s models excel at mimicking human reasoning, they fall short of any real original thinking.
“Models are just trying to predict the most likely thing,” Wolf explained. “But in almost all big cases of discovery or art, it’s not really the most likely art piece you want to see, but it’s the most interesting one.”
Using the example of the game of Go, a board game that became a milestone in AI history when DeepMind’s AlphaGo defeated world champions in 2016, Wolf argued that while mastering the rules of Go is impressive, the bigger challenge lies in inventing such a complex game in the first place. In science, he said, the equivalent of inventing the game is asking these truly original questions.
Wolf first suggested this idea in a blog post titled The Einstein AI Model, published earlier this year. In it, he wrote: “To create an Einstein in a data center, we don’t just need a system that knows all the answers, but rather one that can ask questions nobody else has thought of or dared to ask.”
He argues that what we have instead are models that behave like “yes-men on servers”—endlessly agreeable, but unlikely to challenge assumptions or rethink foundational ideas.
In today’s CEO Daily: Diane Brady on the art of persuasion.
The big story: Trump is giving Iran another two weeks.
The markets: Low drama.
Analyst notes from Goldman Sachs and Oxford Economics on the Fed, UBS on the Iran conflict.
Plus: All the news and watercooler chat from Fortune.
Good morning. As I listened to Sen. Ted Cruz talk to Tucker Carlson about the case for regime change in Iran, I had a flashback to my days on the college debating circuit. Through several years of judging and competing, I had a chance to see future leaders like Boris Johnson, Justin Trudeau, Chicago Fed President Austan Goolsbee, and Cruz. I say that not to brag—though I did once win Canada’s national debating championship by defending the right of the CFL to exist—but to share some lessons that I’ve learned from top debaters.
Every CEO is pressured these days to take a stance on topics that are polarizing or that they might not know much about. The Cruz-Carlson interview is a case study in what not to do.
Debate is about the art of persuasion. In a parliamentary debate competition, you get handed a resolution and have 15 minutes to prepare. If you’re in the opposition, you don’t know how the “government” is going to interpret that resolution until the first speaker opens their mouth—much like an interview where you don’t know what questions or facts will come next.
Your knowledge of a topic is often less important than your ability to convince others that your opponent is an idiot. (Not literally, of course, as that would be an “ad hominem” attack—essentially, a form of gaslighting—which is technically against the rules. Ahem …) To win over a room of rowdy college students, you appeal to logic, emotion, and common sense. You try to make them laugh when it’s funny and get choked up when the topic is sad. It’s a great training ground for populists.
If you’re going to take a controversial stance or disrupt the status quo, do your homework. It’s okay to know very little about a country, for example, if you’re arguing that the U.S. shouldn’t bomb it. The bar is higher when making a case for going to war. Not knowing that country’s population or the source of a biblical reference you’re using to justify a bold stance can give the impression that, to quote Succession, you’re not a serious person on a very serious topic. You risk coming across as defensive, thin-skinned, and angry—qualities that have felled many on a debate stage. And when “you engage in reckless rhetoric with no facts,” as Cruz accused Carlson, you invite the audience to reflect on how each side fared on that front. More news below.
An appeals court on Thursday allowed President Donald Trump to keep control of National Guard troops he deployed to Los Angeles following protests over immigration raids.
The decision halts a ruling from a lower court judge who found Trump acted illegally when he activated the soldiers over opposition from California Gov. Gavin Newsom.
The deployment was the first by a president of a state National Guard without the governor’s permission since 1965.
In its decision, a three-judge panel on the 9th U.S. Circuit Court of Appeals unanimously concluded it was likely Trump lawfully exercised his authority in federalizing control of the guard.
It said that while presidents don’t have unfettered power to seize control of a state’s guard, the Trump administration had presented enough evidence to show it had a defensible rationale for doing so, citing violent acts by protesters.
“The undisputed facts demonstrate that before the deployment of the National Guard, protesters ‘pinned down’ several federal officers and threw ‘concrete chunks, bottles of liquid, and other objects’ at the officers. Protesters also damaged federal buildings and caused the closure of at least one federal building. And a federal van was attacked by protesters who smashed in the van’s windows,” the court wrote. “The federal government’s interest in preventing incidents like these is significant.”
It also found that even if the federal government failed to notify the governor of California before federalizing the National Guard as required by law, Newsom had no power to veto the president’s order.
Trump celebrated the decision on his Truth Social platform, calling it a “BIG WIN.”
He wrote that “all over the United States, if our Cities, and our people, need protection, we are the ones to give it to them should State and Local Police be unable, for whatever reason, to get the job done.”
Newsom issued a statement that expressed disappointment that the court is allowing Trump to retain control of the Guard. But he also welcomed one aspect of the decision.
“The court rightly rejected Trump’s claim that he can do whatever he wants with the National Guard and not have to explain himself to a court,” Newsom said. “The President is not a king and is not above the law. We will press forward with our challenge to President Trump’s authoritarian use of U.S. military soldiers against citizens.”
The court case could have wider implications on the president’s power to deploy soldiers within the United States after Trump directed immigration officials to prioritize deportations from other Democratic-run cities.
Trump, a Republican, argued that the troops were necessary to restore order. Newsom, a Democrat, said the move inflamed tensions, usurped local authority and wasted resources. The protests have since appeared to be winding down.
Two judges on the appeals panel were appointed by Trump during his first term. During oral arguments Tuesday, all three judges suggested that presidents have wide latitude under the federal law at issue and that courts should be reluctant to step in.
The case started when Newsom sued to block Trump’s command, and he won an early victory from U.S. District Judge Charles Breyer in San Francisco.
Breyer found that Trump had overstepped his legal authority, which he said only allows presidents can take control during times of “rebellion or danger of a rebellion.”
“The protests in Los Angeles fall far short of ‘rebellion,’” wrote Breyer, who was appointed by former President Bill Clinton and is brother to retired Supreme Court Justice Stephen Breyer.
The Trump administration, though, argued that courts can’t second guess the president’s decisions and quickly secured a temporary halt from the appeals court.
The ruling means control of the California National Guard will stay in federal hands as the lawsuit continues to unfold.
U.S. President Donald Trump turned to a little-used mechanism—the “golden share”—to ensure that a Japanese-owned U.S. Steel doesn’t become a threat to national security. Nippon Steel, the U.S. steelmaker’s soon-to-be owner, is granting Washington special authority over the company’s operations, though the extent of those powers remains unknown.
Yet while the practice is almost unheard of in the U.S., the “golden share” has popped up in other economies as a way to ensure government oversight—or control—over a company’s operations.
On June 13, Trump issued an executive order clearing Nippon Steel’s takeover of U.S. Steel, which had remained in limbo since the deal was first announced in 2023. Both the preceding Biden administration and the Trump administration had expressed concerns about foreign investment and ownership of a key U.S. industry.
To mitigate these worries, the order announces that both Nippon Steel and U.S. Steel have agreed to enter into a National Security Agreement that gives the U.S. government a perpetual “golden share” in the newly acquired company.
In a late May interview with CNBC, U.S. Senator Dave McCormick (R-Penn.) said a Nippon Steel-owned U.S. Steel wouldhave a “U.S. CEO [and] a U.S. majority board,” and that the government would have to approve major structural changes to the company, such as to production levels or factory locations.
Nippon Steel on Wednesday confirmed that it had granted the U.S. a “golden share,” and said it also granted Washington the power to block production and jobs being transferred outside the U.S. The full terms of the National Security Agreement have not been released to the public.
A golden share doesn’t quite amount to “total control,” as Trump advertised to reporters last week. But it does give the holder—whether a government or some other entity—the ability to outweigh all other shareholders in certain circumstances.
Where are golden shares used?
McCormick, in his May interview, noted that the Nippon Steel control structure would be “somewhat unique.” The U.S. government has not, historically, taken up ownership interest in private companies outside of moments of financial crisis. Even then, the arrangements have been temporary, such as in 2008, when Washington took a controlling share in major auto companies as part of its emergency bailouts.
Yet the practice is more common outside the U.S.
The term “golden share” first appeared in the 1980s, when the Thatcher administration began a campaign to privatize many of its state-owned enterprises. The share was meant to be a compromise solution, allowing the U.K. government a continued say in how thesenewly privatized companies were to be run.
As the privatization bug spread to mainland Europe, many European governments also took special governance rights to retain state influence in previously nationalized companies.
But the European Court of Justice struck down several of these arrangements in the early 2000s, ruling that golden shares constituted unjustified “restrictions on the free movement of capital,” contravening the Maastricht Treaty, the European Union’s founding document.
In 2003, the UK was ordered to give up its golden share in the British Airports Authority. Spain relinquished its governance rights over an array of businesses in telecoms, banking, and tobacco. And in 2007, Germany sold its golden share in Volkswagen.
Still, the UK has retained golden shares in its defense sector, namely in Rolls-Royce, BAE Systems, and two Babcock dockyards. And Westminster may be considering the practice onceagain, recently acquiring a golden share in Royal Mail as a condition of its sale to the Czech EP Group finalized this April.
China embraced something similar to the “golden share” in the early 2010s to exert some state oversight over the country’s budding tech sector. So-called special management shares granted state-backed entities authority over key decisions without requiring full state ownership (as is common in several other sectors of the Chinese economy, such as media).
The Chinese government has taken small stakes in companies like Sina Weibo, which offers an X-like microblogging service, and Kuaishou, a livestreaming platform. It’s also reportedly taken small stakes of units in Chinese tech giants like e-commerce giant Alibaba, gaming publisher Tencent, and TikTok parent ByteDance.
Russia has also welcomed the golden share, which again arose during a domestic privatization drive. In 2019, Yandex, the most popular search engine in Russia, granted its golden share to a “Public Interest Foundation,” which outside observers view as a proxy for government oversight. The Foundation has the authority to temporarily replace Yandex’s management.
What about the U.S.?
In his late May interview, McCormick suggested that the Nippon Steel arrangement could “be a model for transactions that really affect our national security.”
Industrial policy is quickly becoming a bipartisan issue in the U.S., with both Democrats and Republicans supporting measures to protect U.S. manufacturing (even if they differ on the best policies to achieve that). Both sides of the political divide criticized Nippon Steel’s original bid for U.S. Steel as a threat to national security.
Other economists have suggested golden shares could be a way to maintain oversight of sectors that pose a systemic risk to the U.S. economy. In 2023, amid concerns that troubles at Silicon Valley Bank could spiral into a broader financial crisis, Saule Omarova, a onetime Biden nominee for a senior Treasury position, suggested that the U.S. government consider a golden share in systemically important banks.
“It would be structured to serve a single purpose: to give the American public a seat at the table where banks make decisions on how to manage—or perhaps not manage—the risks we ultimately may have to bear,” she suggested in an opinion piece for the New York Times.
U.S. Steel’s new owner isn’t too worried about how Washington’s special powers will affect the business. “We retain sufficient managerial freedom,” Nippon Steel Eiji Hashimoto said to reporters on Thursday, and added that the “golden share” was his company’s idea. “We won’t be constrained in pursuing anything we do.”
Nippon Steel shares are down about 8% for the week so far.
President Donald Trump on Thursday signed an executive order to keep TikTok running in the U.S. for another 90 days to give his administration more time to broker a deal to bring the social media platform under American ownership.
Trump disclosed the executive order on the Truth Social platform Thursday morning.
“He’s making an extension so we can get this deal done,” White House press secretary Karoline Leavitt told reporters on Thursday. “It’s wildly popular. He also wants to protect Americans’ data and privacy concerns on this app. And he believes we can do both at the same time.”
It is the third time Trump has extended the deadline. The first one was through an executive order on Jan. 20, his first day in office, after the platform went dark briefly when a national ban — approved by Congress and upheld by the U.S. Supreme Court — took effect. The second was in April when White House officials believed they were nearing a deal to spin off TikTok into a new company with U.S. ownership that fell apart after China backed out following Trump’s tariff announcement.
It is not clear how many times Trump can — or will — keep extending the ban as the government continues to try to negotiate a deal for TikTok, which is owned by China’s ByteDance. While there is no clear legal basis for the extensions, so far there have been no legal challenges to fight them. Trump has amassed more than 15 million followers on TikTok since he joined last year, and he has credited the trendsetting platform with helping him gain traction among young voters. He said in January that he has a “warm spot for TikTok.”
TikTok praised Trump for signing an extension Thursday.
“We are grateful for President Trump’s leadership and support in ensuring that TikTok continues to be available for more than 170 million American users and 7.5 million U.S. businesses that rely on the platform as we continue to work with Vice President Vance’s Office,” the company said in a statement.
As the extensions continue, it appears less and less likely that TikTok will be banned in the U.S. any time soon. The decision to keep TikTok alive through an executive order has received some scrutiny, but it has not faced a legal challenge in court — unlike many of Trump’s other executive orders.
Jeremy Goldman, analyst at Emarketer, called TikTok’s U.S situation a “deadline purgatory.”
The whole thing “is starting to feel less like a ticking clock and more like a looped ringtone. This political Groundhog Day is starting to resemble the debt ceiling drama: a recurring threat with no real resolution.”
That’s not stopping TikTok from pushing forward with its platform, Forrester analyst Kelsey Chickering says.
“TikTok’s behavior also indicates they’re confident in their future, as they rolled out new AI video tools at Cannes this week,” Chickering notes. “Smaller players, like Snap, will try to steal share during this ‘uncertain time,’ but they will not succeed because this next round for TikTok isn’t uncertain at all.”
For now, TikTok continues to function for its 170 million users in the U.S., and tech giants Apple, Google and Oracle were persuaded to continue to offer and support the app, on the promise that Trump’s Justice Department would not use the law to seek potentially steep fines against them.
Americans are even more closely divided on what to do about TikTok than they were two years ago.
A recent Pew Research Center survey found that about one-third of Americans said they supported a TikTok ban, down from 50% in March 2023. Roughly one-third said they would oppose a ban, and a similar percentage said they weren’t sure.
Among those who said they supported banning the social media platform, about 8 in 10 cited concerns over users’ data security being at risk as a major factor in their decision, according to the report.
Democratic Sen. Mark Warner of Virginia, vice chair of the Senate Intelligence Committee, said the Trump administration is once again “flouting the law and ignoring its own national security findings about the risks” posed by a China-controlled TikTok.
“An executive order can’t sidestep the law, but that’s exactly what the president is trying to do,” Warner added.
President Donald Trump honored Juneteenth in each of his first four years as president, even before it became a federal holiday. He even claimed once to have made it “very famous.”
But on this year’s Juneteenth holiday on Thursday, the usually talkative president kept silent about a day important to Black Americans for marking the end of slavery in the country he leads again.
No words about it from his lips, on paper or through his social media site.
Asked whether Trump would commemorate Juneteenth in any way, White House press secretary Karoline Leavitt told reporters: “I’m not tracking his signature on a proclamation today. I know this is a federal holiday. I want to thank all of you for showing up to work. We are certainly here. We’re working 24/7 right now.”
Asked in a follow-up question whether Trump might recognize the occasion another way or on another day, Leavitt said, “I just answered that question for you.”
On Wednesday, Black community leaders from across the country, senior Trump administration officials and other individuals met at the White House to discuss improving coordination between the leaders and federal, state and local partners, according to a senior White House official. Housing Secretary Scott Turner and Lynne Patton, director of minority outreach, were among those who attended, said the official, who insisted on anonymity to discuss a private gathering.
The Republican president’s silence was a sharp contrast from his prior acknowledgement of the holiday. Juneteenth celebrates the end of slavery in the United States by commemorating June 19, 1865, when Union soldiers brought the news of freedom to enslaved Black people in Galveston, Texas. Their freedom came more than two years after President Abraham Lincoln liberated slaves in the Confederacy by signing the Emancipation Proclamation during the Civil War.
Trump’s quiet on the issue also deviated from White House guidance that Trump planned to sign a Juneteenth proclamation. Leavitt didn’t explain the change. Trump held no public events Thursday, but he shared statements about Iran, the TikTok app and Fed chairman Jerome Powell on his social media site.
In the evening, Trump complained on the site about “too many non-working holidays” and said it is “costing our Country $BILLIONS OF DOLLARS to keep all of these businesses closed.” But most retailers are open on Juneteenth while most federal workers get a day off because the government is closed.
He had more to say about Juneteenth in yearly statements in his first term.
In 2017, Trump invoked the “soulful festivities and emotional rejoicing” that swept through the Galveston crowd when a major general delivered the news that all enslaved people were free.
He told the Galveston story in each of the next three years. “Together, we honor the unbreakable spirit and countless contributions of generations of African Americans to the story of American greatness,” he added in his 2018 statement.
In 2019: “Across our country, the contributions of African Americans continue to enrich every facet of American life.” In 2020: “June reminds us of both the unimaginable injustice of slavery and the incomparable joy that must have attended emancipation. It is both a remembrance of a blight on our history and a celebration of our Nation’s unsurpassed ability to triumph over darkness.”
In 2020, after suspending his campaign rallies because of the coronavirus pandemic, Trump chose Tulsa, Oklahoma, as the place to resume his public gatherings and scheduled a rally for June 19. But the decision met with such fierce criticism that Trump postponed the event by a day.
Black leaders had said it was offensive for Trump to choose June 19 and Tulsa for a campaign event, given the significance of Juneteenth and Tulsa being the place where, in 1921, a white mob looted and burned that city’s Greenwood district, an economically thriving area referred to as Black Wall Street. As many as 300 Black Tulsans were killed, and thousands were temporarily held in internment camps overseen by the National Guard.
In an interview with The Wall Street Journal days before the rally, Trump tried to put a positive spin on the situation by claiming that he had made Juneteenth “famous.” He said he changed the rally date out of respect for two African American friends and supporters.
“I did something good. I made it famous. I made Juneteenth very famous,” Trump said. “It’s actually an important event, it’s an important time. But nobody had heard of it. Very few people have heard of it.”
Generations of Black Americans celebrated Juneteenth long before it became a federal holiday in 2021 with the stroke of President Joe Biden’s pen.
Later in 2020, Trump sought to woo Black voters with a series of campaign promises, including establishing Juneteenth as a federal holiday.
He lost the election, and that made it possible for Biden, a Democrat, to sign the legislation establishing Juneteenth as the newest federal holiday. Shortly after being sworn in for his second term in January, Trump signed an executive order ending diversity, equity and inclusion initiatives across the federal government, calling them “illegal and immoral discrimination programs.”
Biden issued annual Juneteenth proclamations during his four years in office, and observed some of the holidays with large concerts on the South Lawn. Biden’s final observance in 2024 featured performances by Gladys Knight and Patti LaBelle. Vice President Kamala Harris danced onstage with gospel singer Kirk Franklin.
A data center used by the Trump Media & Technology Group is owned by an investment company belonging to the wealthy Bradley family from Missouri, according to SEC filings.
The Trump Media & Technology Group (TMTG) houses some of its servers in a data center in Omaha, Nebraska, owned by the family office of a longtime Midwestern media mogul.
The server company, “1623 Farnam Road,” is fully owned by the BERKS Group, the private-investment company of the Bradley family, according to public documents sourced from the Securities and Exchange Commission, the Nebraska Secretary of State’s office, and the Missouri Secretary of State’s office. The BERKS Group is an investment company, run essentially like a family office, which the Bradley family set up after they sold the majority of the assets from the News-Press & Gazette Company (NPG), the longtime media company that owns newspapers, televisions channels, and radio stations across the country.
The existence of the server might sound like an unsurprising technicality, given that TMTG is an online media company. But TMTG often keeps these relationships close to its chest. It has redacted mention of 1623 Farnam in the majority of its SEC filings. Fortune found mention of the 1623 Farnam facility in a footnote of a contract between TMTG and one of its vendors, WorldConnect Technologies. In that agreement, WorldConnect was due 2.5 million shares of TMTG stock at the opening of the first data center at 1623 Farnam’s location in Omaha.
The relationship adds detail to the business partners and structure of TMTG, which comprises a major portion of President Donald Trump’s personal net worth.
1623 Farnam declined to comment on the record for this story. TMTG did not respond to a request for comment.
Fortune’s series on Trump Media & Technology Group
Trump is TMTG’s largest shareholder, controlling 53% of the company. Despite holding no formal role in TMTG, its success as a business is nonetheless directly linked to his own net worth. Based on TMTG’s current stock price, Trump’s roughly 114 million shares are worth about $3.6 billion. In December, Trump placed his shares in a revocable trust controlled by his son and current TMTG board member Donald Trump Jr.
While the president may have made the majority of his fortune as a real estate developer and TV personality, in reality he is now a technology mogul. In his past life, his business relationships may have been with companies that poured cement or fitted I-beams for skyscrapers. Now they are with technology vendors that develop the content delivery networks that power streaming content or with data center providers like 1623 Farnam.
These companies are not household names, nor do they provide services that ordinary consumers of social media apps or streaming services consider as they use them in their daily lives. Yet they are crucial to the operations of any tech company, including TMTG. Given Trump’s financial stake in TMTG and his current role as President of the United States they present new possible conflicts of interest that are unique to the 21st century.
1623 Farnam provides TMTG access to the networking capabilities that allow it to connect to the internet. In the telecommunications industry companies such as 1623 Farnam are known as “carrier hotels,” which are physical locations that serve as meeting points for the many networks that make up the internet.
“The internet is not a single network,” said University of Massachusetts computer science professor Ramesh Sitamaran. “It is a collection of a large number of independent networks. For [information] to be sent from one place on the internet to another, it has to go through a number of independent networks. So, you need places where networks can physically ‘meet’ each other to exchange [information]. Carrier hotels facilitate that meeting.”
Carrier hotels were early precursors to cloud computing, but still remain critical pieces of technology infrastructure that are crucial to how the internet operates. Because they connect many different networks in a single location they are often found in downtown areas of big cities, meaning that there are relatively few of them, which in turn has made them valuable investment opportunities.
“One could argue this is as important as power, sewer and water,” Brian Bradley, an owner in the BERKS Group and the current president of NPG, said in 2018 when it acquired 1623 Farnam.
A family affair
The Bradleys are a wealthy family from St. Joseph, Missouri, whose patriarch, Henry Bradley, made a fortune in the news business after buying up dozens of regional newspapers in the Midwest and later local television and radio stations under NPG. In 2011, the family sold the majority of its broadcast assets to SuddenLink Communications, a former subsidiary of Altice, for a reported $350 million.
Since then, the Bradleys have mostly focused on running their the BERKS Group, which invests in manufacturing, edtech, and technology infrastructure, according to its website. Six members of the Bradley family currently serve in the BERKS Group’s leadership as both board members and executives, according to its website.
The BERKS Group bought 1623 Farnam in 2018 for an undisclosed price. At the time, the company was known as Nebraska Data Center. The BERKS Group pledged to invest $30 million over five years in 1623 Farnam when it purchased the company.
TMTG’s ‘uncancelable’ media network
As TMTG continues to build up its technology stack, it has developed commercial relationships with little-known business-to-business companies, such as 1623 Farnam. Despite being unfamiliar to most, these companies now play a significant role in the operations of TMTG.
For the better part of a year, TMTG has been engaged in a process to build its own proprietary technology infrastructure to power both its X-like Truth Social and a nascent video streaming platform Truth+. Earlier this week TMTG also announced it would develop a fintech platform called Truth.Fi. TMTG regularly touts this system in SEC filings as integral to its mission to become “uncancelable” by Big Tech. The data center at 1623 Farnam was the first location to house the network for TMTG’s burgeoning tech holdings.
In November 2024, TMTG announced all of its data centers were fully operational. The contract with WorldConnect grants it further stock incentives for five total data centers. It was not clear where those additional data centers are located or whether they were all operational.
TMTG announced its first data center was online in August 2024, around the time it began rolling out its streaming service. Currently, TMTG has a standalone streaming platform called Truth+, which is available on iOS, Android, and Amazon Fire TV, as well as live content within its Truth Social app. These capabilities are housed on a proprietary content delivery network developed by Perception Group, which was introduced to TMTG by WorldConnect Technologies, according to previous reporting from Fortune, an obscure company with no website, run by associates of James E. Davison, a Louisiana businessman and major Republican donor.
Family political donations
The Bradley family also has a history of making personal donations to Republican candidates over the years, according to data from the Federal Election Commission and Open Secrets. From 2014 to 2024, the six family members employed at the BERKS Group gave at least $76,000 to various Republican candidates in total. None of the Bradley family members have donated directly to any of President Donald Trump’s three presidential campaigns, according to the records reviewed by Fortune.
Two family members, Rall Bradley and Eric Bradley, also donate regularly to Democratic candidates, including in the most recent election cycle, according to data from Open Secrets. The family also donates to the political arm of the broadcast industry’s D.C. lobbying group, the National Association of Broadcasters, which backs both Republican and Democratic candidates.
Airlines the world over are reporting a surge in business as tourists go traveling again. Carriers earned a total net profit of $32.4 billion last year, up 18% from the year before, while passenger numbers hit a new high of 4.8 billion.
In Southeast Asia, airlines like VietJet, Thai Airways, and Garuda Indonesia posted double-digit revenue growth last year. But the most impressive performance came not from a carrier, but rather a company that keeps its feet on the ground.
Singapore’s SATS, which provides an array of services including food preparation, air cargo handling and passenger services, tripled its revenue in 2024, lifting the company to No. 93, a jump of 134 places, on this year’s Southeast Asia 500. SATS’s 2024 revenue now stands at $3.8 billion. SATS was the biggest climber on this year’s list, not including newcomers.
Much of SATS’s revenue growth comes after its completed acquisition of Worldwide Flight Services (WFS), a global air cargo logistics provider. SATS bought the company for 1.3 billion euros ($1.5 billion at current exchange rates) in a deal announced in early 2023.
SATS’s acquisition of WFS now makes the Asia-centric company much more of an international player. WFS is the world’s largest cargo handling firm, and is a major player in both Europe and the Americas.
A combined SATS-WFS has a combined reach of more than 215 locations worldwide, covering trade routes responsible for more than half of global air cargo volume.
SATS’s history stems back to the early days of commercial aviation in Singapore, starting as the ground division for Malayan Airlines. That airline later split into Singapore Airlines (SIA) and Malaysian Airline Systems. SIA then established its ground handling business as a separate business in 1972.
Now, SATS is the main air cargo, ground handling and inflight-catering services provider for Singapore’s largest civilian international airport, Changi Airport. SATS has since expanded its footprint throughout Asia, forming joint ventures in markets like mainland China, Taiwan, Hong Kong, the Philippines, and Indonesia.
In its most recent financial report for the quarter ending March 2025, SATS reported a 13% jump in revenue year-on-year to reach 5.8 billion Singapore dollars ($4.53 billion at current exchange rates), driven by a growth in business volume and revenue contributions from its expanded network.
“Our cargo volumes have consistently outperformed IATA’s global growth benchmarks, demonstrating our ability to leverage our expanded network to secure new contracts,” SATS said in its annual report.
The company aims to hit 8 billion Singapore dollars ($6.2 billion) in revenue by the end of its 2029 fiscal year, thanks to a larger network, growth in Asia-Pacific passenger volumes, and Singapore’s role as an aviation hub.
For all of their fast growth, Asia’s economies are grappling with stagnant productivity. Much of Asia’s recent growth is driven by greater investment, and not by improvements in total factor productivity, or in how efficiently inputs are turned into outputs. At best, productivity growth is slowing down; at worst, it’s declining.
And even where productivity is still improving, it’s not doing so fast enough to catch up to leading firms in developed markets like the U.S. Throughout the 2010s, leading firms throughout Southeast Asia grew productivity below the global average. (China, by comparison, managed to keep up.)
“In just about every Asian market, productivity as a measure of GDP divided by GDP per capita is stagnating or declining,” Simon Tate, Asia-Pacific president for Workday says. “Every executive that I talk to is worried about productivity,” whether due to aging population, poor public policy, or the rise of remote work.
In the past, Asian firms had an easy solution to the productivity problem: Just throw more people at the problem. Cheap labor allowed manufacturers and firms to expand without hurting margins.
But as Asia’s economies get richer and older, hiring more people is no longer the easy solution it used to be. “There are no more people,” Tate says. “There is no more productivity to be gained from just throwing people at the problem.”
Let the youth take over
Executives like Tate often argue that AI, particularly “agentic AI,” can help lift productivity. In theory, these newer forms of AI can autonomously carry out user-defined tasks, freeing up the human employee to do more.
Almost all Asian companies say they want to adopt these new technologies. A February survey from Accenture found that nine out of 10 Asian businesses were preparing to adopt some form of agentic AI in the next three years.
But actually putting these models into practice is another question, particularly for older executives with little experience working with AI at all, let alone AI agents.
Tate notes that Asia’s workplaces will soon be home to five different generations, spanning from boomers all the way through to the youngest workers, the so-called Generation Alpha.
“Generation Alpha will have a higher degree of digital fluency than the other four previous generations combined,” Tate says, adding that today’s HR officers are “not at all prepared” for the flood of AI-savvy young workers.
Around 80% of Gen Z workers in Asia-Pacific want to have the most modern technologies in their workplace, according to a recent report from Workday. Just over two-thirds of these workers would see the lack of cutting-edge technology as a negative.
But Tate thinks the answer is more than just giving younger employees the space to thrive in the office. He suggests Asian companies go one step further, and treat younger generations as a source of much-needed expertise.
“When you look at the make-up of boards of the top 100 public companies across APAC, board positions—even advisory board positions—are still very much made up of baby boomers and Gen Xers,” he says, with “close to zero” positions held by those in their twenties and thirties.
Tate suggests companies consider “reverse mentoring,” or getting a younger person to train up older cohorts in how new technologies can be best applied. In much the same way that a millennial or Gen-Z founder might ask someone from an older generation to serve as a board director, Tate suggests that established companies consider appointing a younger member of society to provide their own expertise on technology and business.
“We just falsely assume that they’re too young and they don’t have any good ideas,” he says. “If you put a bunch of really bright, super ambitious people in a room and throw a problem at them, they will add value in helping to solve it.”
Simon Tate, Workday's Asia head, suggests companies consider “reverse mentoring,” or getting a younger person to train up older cohorts in how to best apply new technologies.
Hello and welcome to Eye on AI. In this edition…the new Pope is all in on AI regulation…another Chinese startup challenges assumptions about how much it costs to train a good model…and OpenAI CEO Sam Altman says Meta is offering $100 million signing bonuses to poach AI talent.
Last week, OpenAI CEO Sam Altman wrote on his personal blog that: “We are past the event horizon; the takeoff has started. Humanity is close to building digital superintelligence, and at least so far it’s much less weird than it seems like it should be.” He went on to say that 2026 would be the year that we “will likely see the arrival of systems that can figure out novel insights. 2027 may see the arrival of robots that can do tasks in the real world.”
Altman’s blog created a buzz on social media, with many speculating about what new development had caused Altman to write those words and others accusing Altman of shameless hype. In AI circles, “takeoff” is a term of art. It refers to the moment AI begins to self-improve. (People debate about “slow take off” and “fast take off” scenarios. Altman titled his blog “The Gentle Singularity,” so it would seem Altman is positioning himself in the slow—or at least, slowish—takeoff camp.)
In the blog, Altman made it clear he was not yet talking about completely automated self-improvement. Rather, he was talking about AI researchers using AI to help them develop yet more capable AI. “We already hear from scientists that they are two or three times more productive than they were before AI,” he wrote. “We may be able to discover new computing substrates, better algorithms, and who knows what else. If we can do a decade’s worth of research in a year, or a month” then the rate of AI progress will accelerate from its already rapid clip.
Altman allowed that “of course this isn’t the same thing as an AI system completely autonomously updating its own code, but nevertheless this is a larval version of recursive self-improvement.”
But, as Altman is probably aware, there are a growing number of AI researchers who are in fact looking at ways to get AI to improve its own code.
The ‘Darwin Goedel Machine’
Just a few weeks ago, Jeff Clune, a well-known AI researcher who holds positions at both the University of British Columbia and Google DeepMind, and a team from Tokyo-based AI startup Sakana AI published research on what they called a “Darwin Goedel Machine.”
This is AI that evolves its own code to perform better on a benchmark test that measures how well AI models function as “coding agents” that can write and evaluate software programs. The first initial agent is tested on the benchmark. Then it is prompted to evaluate the logs of its own performance on that benchmark and propose one single modification to its own code that would likely improve its performance on that benchmark (this could be the ability to use a particular software tool, or it could be something more fundamental in how the model reasons about the code it is generating). The AI model is then told to rewrite its own Python code to implement that one change. Then the new, evolved agent is tested again on the benchmark and the process repeats.
After the first modification, each new version of the AI that can successfully try the benchmark is stored in an archive—even if its score is lower than the parent version. (Those that fail to produce valid code at all are discarded.) The AI is then told it can pick any version of itself from the archive and propose changes to that version. This is designed to prevent the model from going down what will ultimately prove to be an evolutionary dead-end, allowing it to step across different evolutionary pathways to find useful modifications.
After 80 generations, the Darwin Goedel machine was able to improve its performance from an initial 20% score on SWE-Bench, a common coding benchmark, to 50%. On Polyglot, another coding test, it boosted its score from an initial 14.2% to 30.7%. (The best human-coded agent for that particular test only scores 16%.) What’s more, the strategies the model came up with to improve its own performance were general enough that they still worked when researchers switched the underlying foundation model being used to power the system as well as if the researchers asked the model to switch coding languages, for instance going from Python to C++.
Is self-improving AI safe?
If you think self-improving AI sounds a little scary—like it might be possible for this sort of AI to escape human control—you’re right. The computer scientists acknowledge this and emphasize that they tested the system in a “sandbox” where its access to the web was “strictly limited,” according to the Sakana blog describing the research.
The researchers also speculated that self-improvement could be a tool for enhancing AI safety. For instance, in a discovery that is becoming alarmingly common when using advanced AI models, the research team found that the Darwin Goedel Machine sometimes lied about having conducted certain unit tests on the code it was writing—and even forged logs supposedly showing the successful test results.
The researchers wanted to see if the Darwin Goedel Machine could propose ways to keep itself from engaging in this deceptive behavior. So it decided to give the model points for reducing instances of “tool use hallucination,” and asked it to try to maximize that score. This worked in many cases, the researchers reported, with instances of faked test logs declining. But in other cases, the model simply tried to cheat again—removing the markers the researchers used to detect hallucinations, even when the prompt the researchers used told the model explicitly not to do this. Yikes!
Because the researchers had full access to all code changes the AI was making and the AI had no ability to alter this record, the researchers were easily able to see that the Darwin Goedel Machine was attempting to engage in this kind of deception. “While in this case the issue was easily detected, more work is needed to prevent the model from attempting to cheat in this way in the first place,” the researchers wrote.
So, Altman may indeed be right—we are past the event horizon. But as these results show, whether the singularity will be a gentle one, as Altman suggests, remains to be very much to be seen.
With that, here’s more AI news. (And hat tip to Google DeepMind research scientist Ed Hughes for highlighting the Darwin Goedel paper in his fascinating talk at the always interesting Research and Applied AI Summit in London last week.)
OpenAI Sam Altman wrote on his personal blog last week that humanity had "passed the event horizon" at which AI begins to improve itself. His assertion was hotly debated on social media. But new research suggests he may be right.
Luxury brands are retreating to exclusivity after years of trying to broaden their appeal, but they’re now struggling to reconcile that elusiveness with younger consumers’ desire to share and express identity online. With the luxury market shrinking—marked by a 3% dip in early 2025 and the loss of around 50 million customers—brands must urgently innovate to maintain relevance, exclusivity, and emotional connection in the social media era.
Luxury brands have retreated back to their safe space of exclusivity, having explored new avenues to win customers during COVID. The only problem is, to win and retain the next generation of shoppers they must marry their need to remain elusive with a consumer who wants to share everything online.
These companies have no time to waste. According to a spring update on the sector from Bain & Co, the industry is losing speed relatively quickly.
The study released Thursday shows the sector’s worth was €1.5 trillion ($1.7 trillion) in 2024, though for Q1 of 2025 estimates are shrinkage of 3% compared to last year.
Even last year, personal luxury goods was one of the categories which marked the most notable slowdown, knocking from €369 billion in 2023 down to €364 billion in 2024. That marked its first contraction in 15 years—with the notable exception of the pandemic.
And the gap between winners and losers in the luxury sector is also growing, added the author’s writers Claudia D’Arpizio and Federica Levato.
The gap between the top 75th percentile and the bottom 25th percentile performers increased by 1.5 times in Q1 2025 compared to a year earlier, with market leaders continuing to charge ahead while the bottom 20% to 30% of the sector continued to report a reduction in growth.
Part of the problem is consumers are wrangling with what Bain & Co describes as the “value equation”—basically, are they getting enough—be it experience, social and cultural kudos, or workmanship—out of the purchase for the elevated price they are paying?
For a “long period” luxury brands were trying to enlarge their customer base to be more inclusive, D’Arpizio tells Fortune. This was really reinforced in some categories with “entry items like streetwear, sneakers, and even beauty—all the categories that could have been more relevant for young people, but also with people with less discretionary spending.”
That strategy “overcorrected” she added, with brands overly relying on iconic design or experiences, reducing their pace of innovation and hence, leading consumers to question if their spend is really worth it.
“So last year we had a big loss of customers—around 50 million less customers buying luxury product—in particular in the younger generation, and a big drop on customer advocacy,” D’Arpizio continued. “What is happening now that the brands are trying to fix that, and trying to reignite this relationship with these customers without losing their exclusivity.”
Exclusivity in the online age
Shifting back to exclusivity is a more difficult ask when younger consumers are known as the social media generation for their propensity to post online.
Gone are the days of galas with no cameras, of designer handbag back rooms with no filming allowed: It’s all available on a For You Page within moments of ending.
“Luxury has always been about showing off,” D’Arpizio, who is Bain & Co’s lead for the global fashion, luxury goods vertical, continued. “The previous generation was showing off wealth and showing off accomplishments in life, now it’s more showing off of your of your personality or your ability to choose your aesthetics, your quality of life.
“There is a big need, in particular in Gen Z, for sharing. This sharing means expressing their personality … but also a desire of conformity. These are two forces that are contradictory but in reality are a big driver for luxury consumption because luxury brands can provide this conformity, but then inside the luxury brand, mixing and matching, choosing your own style, developing your own style, creates your self-expression.”
She continued: “Social media has provided a huge impulse to luxury consumption because the potential of sharing with a larger audience has created both more customers but also in augmentation of their communication strategies and so they have a broader reach.
“So yes, they want to be exclusive, but they know the power of social media.”
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